Friday, October 17, 2008

Grand River Dam Authority litigation

On November 7, 2007, a group of water providers filed suit against the Grand River Dam Authority, the USA, the Federal Energy Regulatory Commission, the Army Corps of Engineers, the OWRB, and the Cherokee Nation, seeking greater access to water rights in Grand Lake. The water providers base their claim on an old U.S. Supreme Court decision that rejected an argument by the GRDA that the GRDA held title to the water in Grand Lake. In a Tulsa World article on November 9, 2007, the plaintiffs’ counsel stated that the lawsuit was filed because of an increase in raw water rates charged by the GRDA.

On February 26, 2008, the Court dismissed the Cherokee Nation on the basis of sovereign immunity. The plaintiffs had argued that the federal McCarran Amendment had abrogated immunity because the McCarran Amendment allowed suits against the USA for adjudication or administration of certain water rights. But in 1983, the U.S. Supreme Court held that the McCarran Amendment does not extend to Native American parties to lawsuits. Arizona v. San Carlos Apache Tribe, 463 U.S. 545, 567 n.17 (1983).

With their March 27, 2008 First Amended Complaint, the plaintiffs named the USA as trustee of the Oklahoma Indian Tribes, along with the Federal Energy Regulatory Commission and the Army Corps of Engineers.

The U.S. Attorney filed a motion to dismiss on April 7, 2008. The USA argued that the McCarran Amendment does not apply because the plaintiffs seek to adjudicate only the rights of certain parties. The lawsuit is not a comprehensive adjudication of water rights as required by the McCarran Amendment. The lawsuit does not include all potential water right claimants to the Grand River watershed. The GRDA and Cherokee Nation are indispensable parties.
The action was dismissed by order entered on July 21, 2008, siding with the USA on the lack of a comprehensive adjudication for purposes of the McCarran Amendment. Notably, Chief Judge Eagan stated as follows regarding the old Supreme Court decision:

Regardless of whether the McCarran Amendment permits parties with predetermined rights to be absent from “supplemental” adjudications, the United States Supreme Court did not determine GRDA’s rights to the water at issue in Grand River Dam Authority. The Court merely found that the United States possessed the superior right under the Commerce Clause to build the Fort Gibson dam or to license another to do so. The Court did not decide the totality of GRDA’s rights to the water in the Grand River vis-à-vis the United States or any other potential claimant. In fact, the Court expressly left unanswered the United States’ contention that its rights preempted state-created property rights in nonnavigable waters. Contrary to plaintiffs’ assertion, therefore, GRDA’s rights have not been determined.

This action is currently on appeal to the Tenth Circuit. The case is in the very early stages of a Tenth Circuit appeal.